1.3.22 Provisions, Contingent Liabilities

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying eco¬
nomic benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the obli¬
gation. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.

Disclosure of contingent liability is made when there is a
possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-oc-

currence of one or more uncertain future events not wholly
within the control of the Company or a present obligation
that arises from past events where it is either not probable
that an outflow of resources embodying economic benefits
will be required to settle or a reliable estimate of amount
cannot be made.

1.3.23 Events after Reporting Date

Where events occurring after the Balance Sheet date pro¬
vide evidence of condition that existed at the end of report¬
ing period, the impact of such events is adjusted within the
financial statements. Otherwise, events after the Balance
Sheet date of material size or nature are only disclosed.

1.3.24 Non - Current Assets Held For Sales

Non-current assets are classified as held for sale if their
carrying amount will be recovered principally through a sale
transaction rather than through continuing use and sale is
considered highly probable.

A sale is considered as highly probable when decision has
been made to sell, assets are available for immediate sale
in its present condition, assets are being actively marketed
and sale has been agreed or is expected to be concluded
within 12 months of the date of classification.

Non-current assets held for sale are neither depreciated nor
amortised.

Assets and liabilities classified as held for sale are measured
at the lower of their carrying amount and fair value less cost
of sale and are presented separately in the Balance Sheet.

1.3.25 Cash Flows Statement

Cash Flows Statements are reported using the method set
out in the Ind AS - 7, "Cash Flow Statements", whereby the
Net Profit / (Loss) before tax is adjusted for the effects of
the transactions of a Non-Cash nature, any deferrals or ac¬
crual of past or future operating cash receipts or payments
and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, invest¬
ing and financing activities of the Company are segregated.

1.3.26 Cash and Cash Equivalents

Cash and cash equivalents comprise of cash on hand, cash
at banks, short-term deposits and short-term, highly liquid
investments that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of
changes in value.

1.3.27 Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time
to time. MCA has notified Ind AS-117 - Insurance Contracts
and amendments to Ind AS-116 - Leases, relating to sale
and leaseback transactions, applicable to the Company
w.e.f. April 1, 2024. The Company has reviewed the new pro¬
nouncements and based on its evaluation has determined
that it does not have any significant impact in its financial
statements.

1.4 Critical Accounting Judgments and Key Sources of Estima¬
tion Uncertainty:

The preparation of the Company’s Financial Statements
requires management to make judgment, estimates and
assumptions that affect the reported amount of revenue,
expenses, assets and liabilities and the accompanying
disclosures. Uncertainty about these assumptions and es¬
timates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities
affected in next financial years.

1.4.1 Income Tax

The Company’s tax jurisdiction is in India. Significant judg¬
ments are involved in estimating budgeted profits for the
purpose of paying advance tax, determining the income tax
provisions, including the amount expected to be paid / re¬
covered for uncertain.

1.4.2 Property Plant and Equipment/ Intangible Assets

Estimates are involved in determining the cost attributable
to bringing the assets to the location and condition neces¬
sary for it to be capable of operating in the manner intended
by the management. Property, Plant and Equipment/Intangi-
ble Assets are depreciated/amortised over their estimated
useful life, after taking into account estimated residual value.
Management reviews the estimated useful life and residu¬
al values of the assets annually in order to determine the
amount of depreciation/ amortisation to be recorded during
any reporting period. The useful life and residual values are
based on the Company’s historical experience with simi¬
lar assets and take into account anticipated technological
changes. The depreciation/amortisation for future periods is
revised if there are significant changes from previous esti¬
mates.

1.4.3 Defined Benefits Obligations

The costs of providing Gratuity and other post-employment
benefits are charged to the Statement of Profit and Loss in
accordance with Ind AS - 19, "Employee Benefits" over the
period during which benefit is derived from the employees’
services. It is determined by using the Actuarial Valuation
and assessed on the basis of assumptions selected by the
management. An actuarial valuation involves making vari¬
ous assumptions that may differ from actual developments
in the future. These assumptions include salary escalation
rate, discount rates, expected rate of return on assets and
mortality rates. Due to complexities involved in the valuation
and its long term in nature, a defined benefit obligation is
highly sensitive to change in these assumptions. All as¬
sumptions are reviewed at each balance sheet date.

1.4.4 Fair value measurements of Financial Instruments

When the fair values of financial assets and financial lia¬
bilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value
is measured using valuation techniques, including the dis¬
counted cash flow model, which involve various judgments
and assumptions.

conditions as well as forward-looking estimates at the end
of each reporting period.

In case of non-financial assets company estimates asset’s
recoverable amount, which is higher of an asset’s or Cash
Generating Units (CGU’s) fair value less costs of disposal and
its value in use.

In assessing value in use, the estimated future cash flows
are discounted to their present value using pre-tax discount
rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In deter¬
mining fair value less costs of disposal, recent market trans¬
actions are taken into account, if no such transactions can
be identified, an appropriate valuation model is used.

1.4.8 Recognition of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities are recognised for deduct¬
ible temporary differences and unused tax losses for which
there is probability of utilisation against the future taxable
profit. The Company uses judgment to determine the amount
of deferred tax that can be recognised, based upon the likely
timing and the level of future taxable profits and business
developments.

Note-32- Details of Employee Benefits:

The Company has the following post-employment benefit plans:

A. Defined Contribution Plan

Contribution to defined contribution plan recognised as expense for the period is as under:

The Company offers its employees benefits under defined contribution plans in the form of provident fund. Provident fund cover
substantially all regular employees which are on payroll of the company. Both the employees and the Company pay predeter¬
mined contributions into the provident fund and approved superannuation fund. The contributions are normally based on a
certain proportion of the employee's salary and are recognised in the Statement of Profit and Loss as incurred.

(iii) Characteristics of defined benefit plans and risks associated with them:

Valuation of defined benefit plan are performed on certain basic set of pre-determined assumptions and other regulatory frame¬
work which may vary over time. Thus, the Company is exposed to various risks in providing the above benefit plans which are as
follows:

A. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience:

Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is
higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity
Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of
cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount
rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the
Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at
the resignation date.

B. Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the
fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future
discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in
the discount rate during the inter- valuation period.

C. Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If
some of such employees resign/retire from the company there can be strain on the cashflows.

D. Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One
actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An
increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption
depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in
the yields as at the valuation date.

E. Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/
regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits
to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be
recognized immediately in the year when any such amendment is effective.

A. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience:

Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is
higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity
Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of
cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount
rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the
Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at
the resignation date.

B. Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the
fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future
discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in
the discount rate during the inter- valuation period.

C. Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If
some of such employees resign/retire from the company there can be strain on the cashflows.

D. Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One
actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An
increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption
depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in
the yields as at the valuation date.

E. Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/
regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits
to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be
recognized immediately in the year when any such amendment is effective.

Note - 34 - Financial Instruments

Financial Risk Management - Objectives and Policies

The Company’s financial liabilities mainly comprise the loans and borrowings in domestic currency, money related to capital expendi¬
tures, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Compa¬
ny’s financial assets comprise mainly of investments, security deposits, cash and cash equivalents, other balances with banks,
trade and other receivables that derive directly from its business operations.

The Company is exposed to the Market Risk, Credit Risk and Liquidity Risk from its financial instruments.

The Management of the Company has implemented a risk management system which is monitored by the Board of Directors of the
Company. The general conditions for compliance with the requirements for proper and future-oriented risk management within the
Company are set out in the risk management principles. These principles aim at encouraging all members of staff to responsibly deal
with risks as well as supporting a sustained process to improve risk awareness. The guidelines on risk management specify risk
management processes, compulsory limitations, and the application of financial instruments. The risk management system aims to
identify, assess, mitigate the risks in order to minimize the potential adverse effect on the Company’s financial performance.

The following disclosures summarize the Company’s exposure to the financial risks and the information regarding use of derivatives
employed to manage the exposures to such risks. Quantitative Sensitivity Analysis has been provided to reflect the impact of rea¬
sonably possible changes in market rate on financial results, cash flows and financial positions of the Company.

(*) Investment in subsidiaries are measured at cost as per Ind AS 27, "Separate financial statements", and hence not presented
here.

(**) Fair value of financial assets and liabilities measured at amortized cost approximates their respective carrying values as
the management has assessed that there is no significant movement in factor such as discount rates, interest rates, credit risk
from the date of the transition. The fair values are assessed by the management using Level 3 inputs.

(***) The financial instruments measured at FVTPL represents current investments and derivative assets having been valued
using level 2 valuation hierarchy.

Fair value hierarchy

The fair value of financial instruments as referred to in note below has been classified into three categories depending on the
inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical
assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or
in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable
current market transactions in the same instrument nor are they based on available market data.

B. Market Risk

Market Risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market Risk comprises three types of Risk: "Interest Rate Risk, Currency Risk and Other Price Risk". Financial
instrument affected by the Market Risk includes loans and borrowings in foreign as well as domestic currency, retention money
related to capital expenditures, trade and other payables.

(a) Interest Rate Risk

Interest Rate Risk is the risk that fair value or future cash outflows of a financial instrument will fluctuate because of changes in
market interest rates. An upward movement in the interest rate would adversely affect the borrowing cost of the Company. The
Company is exposed to long term and short - term borrowings. The Company manages interest rate risk by monitoring its mix of
fixed and floating rate instruments and taking actions as necessary to maintain an appropriate balance. The Company has not
used any interest rate derivatives.

(i) Cash and cash equivalent and bank balance:

Credit risk related to cash and cash equivalents and bank balance is managed by only accepting highly rated banks and diversi¬
fying bank deposits and accounts in different banks.

(ii) Loans and Other financial assets measured at amortized cost:

Other financial assets measured at amortized cost includes Security Deposit to various authorities , Loans to staff and other
receivables. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts
continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

(iii) Trade receivables:

Life time expected credit loss is provided for trade receivables. Based on business environment in which the Company operates,
a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per
contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current
and historical economic conditions. Assets are written off when there is no reasonable expectation of recovery, such as a
debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose
balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.

(A) Expected credit losses:

Expected credit loss for trade receivables under simplified approach:

The Company recognizes lifetime expected credit losses on trade receivables & other financial assets using a simplified
approach, wherein Company has defined percentage of provision by analyzing historical trend of default based on the criteria
defined below and such provision percentage determined have been considered to recognize life time expected credit losses
on trade receivables (other than those where default criteria are met in which case the full expected loss against the amount
recoverable is provided for). Further, the Company has evaluated recovery of receivables on a case to case basis. No provision
on account of expected credit loss model has been considered for related party balances. The Company computes credit loss
allowance based on provision matrix. The provision matrix is prepared on historically observed default rate over the expected
life of trade receivable and is adjusted for forward - looking estimate. The provision matrix at the end of reporting period is as
follows:

D. Liquidity Risk

Liquidity Risk is the risk that the Company will encounter difficulty in raising the funds to meet the commitments associated
with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability
to sell a financial asset quickly at close to its fair value. Management monitors rolling forecasts of the Company’s liquidity posi¬
tion and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the
market in which the entity operates.

The cash credit and other facilities may be drawn at any time and may be terminated by the bank without notice.

Maturities of Financial Liabilities:

The tables below analyze the Company’s financial liabilities into relevant maturity based on their contractual maturities for all
non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances
due within 12 months equal their carrying balances as the impact of discounting is not significant. AS per Annexure "A"

E. Capital Management

The Company’s capital management objectives are to ensure the company’s ability to continue as a going concern, to provide
an adequate return to share holders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on
the face of balance sheet. Management assesses the Company’s capital requirements in order to maintain an efficient overall fi¬
nancing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various
classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Compa¬
ny may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to
reduce debt.

The Company manages its capital on the basis of Net Debt to Equity Ratio which is Net Debt (Total Borrowings net of Cash and
Cash Equivalents) divided by total equity.

Note - 35 - Balance confirmation of Receivables

Confirmation letters have not been obtained from all the parties in respect of Trade Receivable, Other Non- Current Assets and Other
Current Assets. Accordingly, the balances of the accounts are subject to confirmation, reconciliation and consequent adjustments, if
any.

Note - 36 - Balance Confirmation of Payables

Confirmation letters have not been obtained from all the parties in respect of Trade Payable and other current liabilities. Accordingly,
the balances of the accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

Note - 37 - Events occurring after the Balance sheet Date

The Group evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of the finan¬
cial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial
statements. There are no subsequent events to be recognized or reported that are not already disclosed.

I) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or
kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the undrstanding (whether
recorded in writing or otherwise) that the Intermediary shall directly or indirectly lend or invest in other persons or entities identi¬
fied in any manner whatsoever (Ultimate Beneficiaries) by or on behalf of the company or provide any guarantee, security or the
like to or on behalf of the Ultimate Beneficiaries.

J) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the company shall directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever (Ultimate Beneficiaries) by or on behalf of the Funding Party or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

K) No transactions has been surrendered or disclosed as income during the year in the tax assessment under the Income Tax Act,
1961. There are no such previously unrecorded income or related assets.

L) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

As per report of even date

For, Keyur Shah S Co. For and on the behalf of Board of Directors

F.R. No: 141173W For, KRN Heat Exchanger and Refrigeration Limited

Chartered Accountants

Keyur Shah Santosh Kumar Yadav Anju devi

Proprietor Chairman S Managing Director Whole Time Director

M.No. 153774 (DIN: 07789940) (DIN: 06858442)

Jitendra Kumar Sharma Sonu Gupta

Company Secretary Chief Financial Officer

M. No. A65048

Date : 12^th May, 2025 Date : 12^th May, 2025

Place : Ahmedabad Place : Neemrana